Monday, June 17, 2024

Sugar’s bitter pill continues


Sugar prices and shortages still sour Ethiopia’s urban markets; but the Sugar Corporation, the sole manufacturer and importer says it is supplying enough volume.
The price escalation and shortage of the sweet has dogged the country for the past several decades as production and imports have failed to meet up with the growing demand and since the beginning of the Ethiopian New Year it has become one of the nation’s major issues.
Even though the problem has not gone away industries that use sugar as an ingredient in their products say they are getting enough to continue production. Gashaw Aycheluhem, Public Relations Head of the Sugar Corporation, told Capital that most of the sugar factories are undertaking production as expected while others just started recently.
He said that Metehara, Wonji, Kesem and Fincha factories are actively operating, while Kuraz 2 and Arjo Dedessa are the others which recently commenced production after the heavy rain that halted their production in the past few months.
“Kuraz 2 which began a trial test in March last year stopped production for six months because the rain affected the sugar cane collection process but since the end of last December the factory has commenced production,” he explained.
He said that Arjo Dedessa also started production, but he declined to give a specific daily production volume.
He also stated that the recently procured one million tons of sugar was imported by four different consignment periods.
“The first batch is 250,000 quintals and is already being transported from the port at Djibouti,” he said.
He said that every month the corporation is delivering up to 600,000 quintals of sugar for three different potential end users; regional customers, consumer associations in Addis Ababa and the manufacturing industry. These are the three end sugar users according to the Sugar Corporation. Gashaw stated that the Sugar Corporation is delivering the sweetener, but it is still scarce for industries and consumers.
A representative of a candy manufacturer who did not want to be mentioned told Capital that for the last several months his company is getting half of the usual quota that it secured before. He also stated that the limited supply has affected their production.
Getachew Birbo, Head of Moha Soft Drink, told Capital that in the past year and a half the supply of sugar has been relatively better than the preceding period. He said that their monthly demand is 3,000 quintals, but currently they are getting 2,200 quintals per month.
Gashaw thinks that the current shortage of their soft drinks is related to distribution methods by consumer associations or regional offices. “Distribution is the responsibility of other relevant bodies,” he said.
Currently the price of sugar is over 40 birr per kg if it is available in the market. The stated price is about three times the original price.
Consumers and some service sector professionals are complaining about the shortage. Some in the service sector including big hotels and cafes say they are unable to serve hot drinks due to lack of sugar. Customers stated that it is common to see a sugar shortage in cafes.
According to users the price of soft drinks at retail markets has also increased. Shop owners say this is because of the soaring price of sugar. However, manufacturers have denied there is an increase. According to the Sugar Corp public relations head, the sugar factories Metehara, Wonji, Fincha, Kesem, Arjo, Tendaho and Kuraz 2 have a sugarcane crushing capacity of 5,000, 6,250, 12,000, 6,000, 8,000, 13,000 and 12,000 tons per day respectively. But this does not indicate the current actual production, only their capacity.
Even though the government had plans to construct and commence production of ten new sugar factories during the first GTP (2010-2015), almost all of its projections failed.
In the past year Tendaho and Kesem that commenced over a decade ago and Kuraz 2, which was constructed by the Chinese company have been finished.
Most of the others were managed by MetEC a state industry developer. Some of these have been delayed of have performed weakly. The government has stated that sugar would be a major source of hard currency, but that has failed to materialize.

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